Buying property is not that easy: the legal and formal complexities and pitfalls

Buying a flat or house is a transaction involving a huge financial outlay, so when preparing for it you should pay attention to many legal and formal complexities and pitfalls.

Legal status

When buying a property it is very important to be certain about the rights the seller holds to the property (e.g. ownership, or the cooperative ownership right – spółdzielcze prawo własności) and about the rights to it held by other parties. If the flat has a land and mortgage register (księga wieczysta), we can check who actually holds rights to it in the online database of land and mortgage registers on the Ministry of Justice website. The cooperative ownership right can be checked on the basis of a special certificate issued by the housing cooperative.

Mortgage encumbrances

Information on mortgage encumbrances can be obtained from section IV of the land and mortgage register. There we will find information on whether the property is encumbered with debt, and if so, on what grounds and for what amount.

Limited property rights encumbering the property

This is another very important piece of information that should be checked before buying a flat. It can be obtained from the land and mortgage register, which lists other limited property rights such as usufruct or easements. In addition, information such as a lease, a right of pre-emption, a life annuity right (dożywocie), the right to use a dwelling, or a claim for the transfer of ownership or for the establishment of a limited property right may be found there.

READ ALSO – WHAT IS AN OPEN HOUSING ESCROW ACCOUNT?

A deposit is not the same as an advance payment

What is the difference between a deposit (zadatek) and an advance payment (zaliczka)? If one of the parties fails to perform the contract, the other party has the right to withdraw from the contract and keep the deposit it received or, if it was the one that paid the deposit, demand double the sum. An advance payment is not security for the performance of the contract, only part of the payment. If the contract is not carried out, it is returned to the payer.

Preliminary agreement

This is a very important document securing the performance of the contract, in which both parties undertake to perform it. A preliminary agreement (umowa przedwstępna) can take two forms: an ordinary civil-law agreement or a notarial deed. In the case of an ordinary civil-law agreement, the injured party may claim damages. In the case of a notarial agreement, the injured buyer may seek the conclusion of the promised final contract. What is more, this agreement is entered in the land and mortgage register of the property.

Planning to buy property in Silesia? Contact our agency and get all the formalities and procedures handled efficiently.